CENTENNIAL — Diets, a perennial favorite New Year’s resolution, typically involve counting calories, not pennies.
But Centennial author and blogger Eliza Cross, who has put herself on a Money Diet each January for the past four years, might argue that a financial diet could benefit your waistline as well as your wallet.
“If you’re sticking to a financial diet, then you’re less likely to splurge on convenience foods, like onion dip and a bag of chips, and we’re all usually trying to slim down a bit after Christmas,” Cross said.
“Going on a financial diet means no pizza delivery, not going out to eat, no impulse buys at the cash register. And sticking to a plan for one month helps start the new year strong.”
Battle the bulging budget
Her blog, HappySimpleLiving.com, frequently tackles the battle of the bulging budget, but in January, Cross posts a strategy for each day of the month.
“My favorite idea is for figuring out your net worth,” Cross said.
“That’s the only way to be really honest with yourself about where you’re at, financially.
“Another favorite is shopping at home. We all have things in our homes that we save for someday. In your pantry is a good place to start. Look in the pantry and freezer and find what forgotten goodies are lurking there. Last year, I found coconut milk, lemon curd and wild rice mix. Our goal in January is to use those things, instead of saving them.”
‘I wasn’t aware’
Laura Nelson, a Westminster mortgage fund manager, first tried the January Money Diet in 2011. She and her husband were looking for ways to accelerate paying off two car loans, three student loans, a mortgage and other expenses.
“Before, I wasn’t ‘Throw it to the wind,’ but I wasn’t aware of how much I spent in a month,” Nelson said.
“I figured that once the bills were paid, I could spend the rest of the money. I buy groceries at Target, so if I saw a cute sweater on sale, I’d probably get that, too. But now I think, ‘Do you really need that?’ One of the Money Diet days was Cl ean Out Your Closet Day, and I found all these cute clothes that I never wear. So now I don’t buy something just because it’s on sale. I’ll buy it because I need it.”
That year, Nelson calculated that she saved $515, enough to pay the Nelsons’ automobile insurance.
Her biggest savings came from cooking at home, instead of going out to eat at restaurants.
Every Sunday, she and her husband planned a week’s worth of meals, looked through their pantry for ingredients they already owned, and then went grocery shopping. Their meal-planning included fixing lunches from the previous evening’s supper leftovers.
The Nelsons also made a practice of drawing up a monthly budget. The mortgage and utility bills get paid first, and then they calculate their expenses for groceries and fuel. After budgeting for the essentials, they create a pool of cash for discretionary spending, like a meal at a restaurant or movie tickets.
“We pay all that in cash, because when it’s gone, it’s gone, and it’s easier to track than using a debit card,” Nelson said.
‘Being more conscious about my spending’
Diane Sieg, a yoga teacher and mindfulness coach, is another fan of the January Money Diet.
“I’m not a huge spender, but I’m always looking for ways to become more aware, and I like the idea of being more conscious about my spending,” she said.
“Something I might have bought in December, but won’t in January, is a latte, or something on sale that’s a really good deal. I like Eliza’s ideas about repurposing things in your pantry and your closet.”
The phrase Cross uses instead of “repurposing” is “shopping your closet.” Last year, as she sorted through her closets, she discovered an expensive jar of creme brulee-scented body cream that someone gave her.
“So I used it instead of saving it, and I smelled so good in January last year!” she said.
“It was a luxurious splurge. See, even in the midst of being frugal, you can indulge with things you have around the house. Wear your special clothes. Use the family silver. Listen to your music collection. Use your scrapbooking supplies. Most of us have a lot of stuff that we think we’re going to use someday. Well, now is that ‘someday.’
“And by the end of the month, you’ll have a bunch of money that you can put into savings, or to pay off credit card debt, or put toward a vacation. Instead of frittering money away on little stuff, you’ll have a big chunk that you can do something meaningful with. And once you have that feeling, you’ll want to have it again.”
“Even in the midst of being frugal, you can indulge with things you have around the house. Wear your special clothes. Use the family silver. Listen to your music collection. Use your scrapbooking supplies. Most of us have a lot of stuff that we think we’re going to use someday. Well, now is that ‘someday.’”
Creator of the Money Diet